Thread: Imputed Income Examples?

Originally Posted by spongebue

Ultimately, it depends on your individual tax situation, but that sounds reasonably close to being correct. Obviously, you're not being paid to have someone fly in a situation where imputed income would be charged, but the IRS sees that as a taxable benefit. So if you normally make $600 in a paycheck, and your tax rate is 30%, you will be taxed $180 and take home $420. If you add in $180 in imputed income, the IRS will tax you as if you made $780 - deducting $234 on what is really a $600 paycheck leaving you with $366. The difference in take-home pay in those two scenarios is, you guessed it, $54.

But again, that all depends on your tax rates. You could fall into a different income bracket or something. I'm not an accountant. But in my experience, yes, 30% of imputed income is a good rule of thumb.

Thanks so much - that's exactly what I wanted to know. I'm actually the Registered Companion of an AA employee - so want to make sure I cover his costs entirely.